Terminated school building contractor sues Sutton

SUTTON — The construction company whose $42 million contract for the middle/high school project was terminated by selectmen in October has sued the town, claiming the town was at fault for its inability to properly complete the project.

Town Administrator James A. Smith told selectmen last week about the U.S. District Court lawsuit, filed by TLT Construction Corp. of Wakefield.

Mr. Smith said in an interview, "Town counsel is preparing a response to this lawsuit. We feel it's unfounded."

But he told selectmen it could take years for the litigation to get through the courts and it could go to mediation.

Mr. Smith said Western Surety Co., which holds the bond for the contract, has selected G&R Construction of Quincy to finish building the school.

A contract with G&R will be signed once Western Surety submits an offer to the town for the project costs. Mr. Smith said town counsel was still negotiating that offer, which would not only include construction costs but also reimbursement for legal fees, rental expenses of temporary classrooms and other expenses related to the building delays.

Western Surety sued TLT Construction after Sutton officials placed a claim on the bond in September for town losses from substantial building delays.

TLT's claims against Sutton include wrongful termination of the contract, breach of contract, unjust enrichment of the town by work done by TLT, breach of good faith and fair dealing, failure by Sutton to mitigate any damages, and related claims.

After months of delay in the $57.6 million project, which caused students to start the school year in makeshift quarters in a church, selectmen unanimously voted Oct. 17 to terminate the TLT contract, which had been signed June 23, 2011. Grounds for termination included TLT's failure to execute the work in a timely manner, failure to provide appropriate personnel and materials for the work and failure to pay subcontractors in a timely manner.

Among its arguments that the town unjustly broke the contract, TLT's lawsuit says: "TLT performed its contractual obligations in a good, workmanlike and timely manner notwithstanding numerous change orders, construction change directives, delays and other circumstances beyond the fault, responsibility and control of TLT which served to extend the time reasonably required for the task at hand."

TLT's lawsuit asks the court to determine the amount due from Sutton, including interest, court costs and legal fees.

According to reports filed with the Massachusetts School Building Authority, Sutton had paid TLT $25 million as of May 31, the last time it issued payment to the general contractor, leaving $17 million in the balance.

Also, Sutton began in April assessing damages of $2,500 a day on TLT for not completing its promised work.

The town would be reimbursed vby the state for up to roughly half of the project's eligible costs.

TLT had been awarded the contract in 2011 after submitting the lowest bid among 13 prequalified applicants.

However, TLT was not recertified by the state Division of Capital Asset Management and Maintenance in July 2013 after Sutton and other towns, including Foxboro, Lexington and Westwood, gave the company a failing preliminary score for performance. Earlier last year TLT was terminated by the state of New Hampshire in connection with a contract for the construction of a National Guard facility.

The company cannot apply for recertification, which is required to bid on a public project costing at least $100,000, for at least a year.

TLT's prequalification status at the time it was awarded the contract by Sutton did not include reference to a $6.2 million settlement reached between TLT and Wachusett Regional School District in Holden in December 2008.

TLT sued the Wachusett district for $14.8 million after Wachusett officials stopped paying TLT in October 2007 for renovation of the high school because of delays and other construction problems.

Since Wachusett officials agreed in mediation to settle so the project could be completed, the dispute did not have to be listed on TLT's state prequalification forms or among legal or administrative proceedings pending against it or concluded adversely within the previous five years.

"This has become a recurring theme with TLT," said Jonathan Winikur, project manager for Sutton and a principal at Strategic Business Solutions, when Sutton officials were discussing terminating TLT's contract.

State Rep. Ryan C. Fattman, R-Webster, sent Attorney General Martha Coakley a letter in October asking her office to investigate TLT Construction Corp. for misleading state and local taxpayers.